Prices for March 9th, 2010
| HEATING OIL cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | APR | 210.67 | 206.61 | 208.98 | dn 01.57 | | MAY | 211.91 | 208.03 | 210.26 | dn 01.68 | | JUN | 213.22 | 209.50 | 211.65 | dn 01.72 | | JUL | 215.00 | 211.15 | 213.45 | dn 01.73 | | AUG | 216.61 | 213.21 | 215.28 | dn 01.68 | | SEP | 218.68 | 216.76 | 217.27 | dn 01.69 | | OCT | 221.04 | 219.46 | 219.62 | dn 01.71 | | NOV | 222.97 | 220.35 | 222.12 | dn 01.67 | | DEC | 226.12 | 222.59 | 224.67 | dn 01.63 | | JAN | 227.25 | 225.33 | 227.02 | dn 01.63 | | FEB | 229.25 | 226.70 | 228.32 | dn 01.63 | | MAR | 228.45 | 227.60 | 228.22 | dn 01.63 | | Estimated Volume (day before) total all prev day 77,620 | | NYMEX CRUDE OIL dollars per barrel | | MONTH | HIGH | LOW | SETTLE | CHANGE | | APR | 81.91 | 80.16 | 81.49 | dn 00.38 | | MAY | 82.31 | 80.57 | 81.86 | dn 00.45 | | JUN | 82.73 | 81.04 | 82.30 | dn 00.48 | | JUL | 83.09 | 81.55 | 82.75 | dn 00.50 | | AUG | 83.49 | 81.99 | 83.14 | dn 00.49 | | SEP | 83.69 | 82.37 | 83.48 | dn 00.48 | | | | | | | | | Estimated Volume… 559,143 Opec Basket…$77.86 up $0.59
Prompt #2 Oil NYH 88..-1.25 to -1.00, 74 Lo S…+3.75 to +4.25
US Gulf 88 grade…-4.25 to -3.75, 74 grade Lo S…-1.75 to -0.75 Group .........+3.00 to +3.25 Lo S.....+3.00 to +3.25
Chicago ......-3.50 to -2.50 cash quotes by Dow Jones | | | |
| NYMEX RBOB GASOLINE cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | APR | 228.30 | 223.80 | 226.03 | dn 02.89 | | MAY | 227.93 | 224.00 | 226.23 | dn 02.55 | | JUN | 226.85 | 223.22 | 225.58 | dn 02.27 | | JUL | 225.52 | 222.90 | 224.71 | dn 02.23 | | AUG | 224.10 | 221.83 | 223.72 | dn 02.25 | | SEP | 222.50 | 221.52 | 222.49 | dn 02.30 | | OCT | 211.90 | 211.72 | 211.92 | dn 02.23 | | NOV | 211.06 | 210.84 | 210.70 | dn 02.25 | | Estimated RB Volume day before 133,504 | | NYMEX NATURAL GAS dollars per mmBtu | | MONTH | HIGH | LOW | SETTLE | CHANGE | | APR | 4.603 | 4.476 | 4.516 | dn 0.011 | | MAY | 4.690 | 4.536 | 4.575 | dn 0.015 | | JUN | 4.727 | 4.609 | 4.643 | dn 0.016 | | JUL | 4.812 | 4.693 | 4.735 | dn 0.015 | | | Estimated Volume…day before (163,718)
Nymex statistics are based on composite Access & Day Sessions
Prompt Gasoline NYH M5 -10.75 to -10.50 RBOB -0.50 /+0.00
US Gulf M4: -11.00 to -10.50 RBOB -1.00 to -0.50
L.A. Conv Reg 222.00-223.00, N-grade Group 214.55-215.05 Chi 207.05-208.55 | |
Market Review for Tuesday
IL prices were slightly lower yesterday, in markets dominated by light volume. Equities were up mildly, but trading volume has been extremely light there, recently, and a number of markets have taken their cue from stock markets. Other than sugar, which has fallen to new seven-month lows after having recently reached 29-year highs, this week has started on a very reserved note. Traders seem predisposed to the long side, but they are waiting for the next pulse.
The ultra-low sulfur diesel price premium dropped steeply yesterday on anticipated increases in refinery output over the next several weeks as units start to come back from seasonal maintenance, Dow Jones reported. Refineries typically switch production modes to produce more gasoline and transportation-grade distillates in the warmer half of the year, and switch back to higher heating oil yields for the colder half of the year. This is an ongoing fine-tuning issue that has changed with new rules for the use of low and ultra-low sulfur material, and the mix will be altered if homes use low sulfur fuel in future winters.
| Fuel for Thought Violence is on the rise again in Nigeria, and villagers ran for shelter at the local police barracks after hearing gunshots yesterday near the city of Jos. This followed a massacre on Sunday, in which 500 Christians were reportedly killed by Muslim mobs in other settlements surrounding that city (Jos), which is on the border between Christian and Muslim villages. In January, scores of Muslims from the Fulani ethnic group were killed in the same region. The UN noted that Sunday’s incident was the third of its kind in the area over the last three years, and the UN’s human rights chief chided the Nigerian government for neglecting “villages [that] should have been properly protected.” The UN cited poverty and land disputes as causes. |
A stronger US dollar was seen as the main motive factor behind lower oil prices yesterday, but the greenback lost some of its gains later in yesterday’s session. It remains inside a large consolidation range, right now, and the next breakout in the dollar is likely to have a significant impact on oil prices. We would not put too fine an edge on its importance yesterday.
Oil prices had been under heavier selling pressure early Tuesday morning, before the Nymex opened, and after we had gone to print. A stronger dollar in the wee morning hours and weaker Asian equities had been the main factors behind the morning selling. US equities opened under selling pressure yesterday morning, but a Cisco introduced a new router than excited technology stock traders, and this reportedly lifted equities, which helped oil prices rally in turn. One cannot go to sleep with these markets (always open) anymore.
Last night’s API report showed larger changes than expected, with a huge build in crude oil stocks and nearly as large draws in refined products stocks. Those figures suggest that refineries need to be processing more crude oil into products, but utilization dropped. That is doubly supportive for crack spreads.
Technicals
The oil complex was lower yesterday, but it looked like a dip in a market ready to move higher rather than the beginning of a major decline from an important top. That does not mean that prices might not decline further, first, but we should be looking for opportunities to buy rather than sell, especially in light of seasonal considerations. We still have major resistance in crude oil at $83.95, and a settle above that would be significant and bullish.
Cents per gallon
Above: Gasoline prices have broken to the upside and seem to have embarked upon a new leg higher.
April crude oil now has buy-stops over $81.91, $82.41, $83.95, $84.83, $85.13, $89.82, $90.99, $93.02, $96.03, and $100.37. Sell-stops are under $80.00, $79.40, $78.00, $77.00, $76.30, $73.70, $72.60, $71.30, $70.75, $69.30, $68.55, $68.00, $65.80-$66.20, and $64.95. April heating oil has buy-stops over 210.67, 211.90-212.00, 217.55, 222.72, 225.80, 227.05, 229.08, 238.95, 249.62, and 251.50. Sell stops are under 206.60, 206.00, 205.40, 201.55, 200.55, 199.00, 196.40, 190.75, 189.95, 187.45, 186.50, 182.63, 177.00, 176.68, 173.75, 171.10, 170.35, and 168.60. April RBOB has buy-stops over 228.30, 229.51, 240.10, 250.40, 252.00, 265.10, 267.85, and 270.85. Sell-stops are under 223.80, 221.70, 219.00-219.10, 215.50, 213.70, 203.80, 202.25, 198.40, 191.85, 187.00, 184.15, 182.40, 181.20, 179.20, 177.30, 175.14, 171.40, and 170.25.
Football: The bulls lost four yards yesterday on second and six, making it third and 10 to go, today.
Technical Support & Resistance
Apr crude oil Support: $80.15-$80.30, $79.40-$79.50, $78.00-$78.10, $77.00-$77.20, $76.30-$76.60.
Resistance: $81.80-$81.91, $82.30-$82.41, $83.85-$83.95, $84.75-$84.85, $85.00-$85.15.
Apr heating oil Support: 206.60-206.75, 206.00-206.20, 205.40-205.55, 201.55-201.70, 200.55-200.70.
Resistance: 210.55-210.67, 211.80-212.00, 217.45-217.55, 222.65-222.75, 225.65-225.80.
Apr Rbob Support: 223.80-224.10, 221.70-221.90, 219.00-219.15, 215.50-215.65, 213.70-213.85.
Resistance: 228.15-228.30, 229.40-229.51, 239.95-240.10, 250.25-250.40, 251.80-252.00.
Oil Inventory Reports
This week’s DOE report has historically shown drawdowns in refined products stocks and builds in crude oil inventories. Crude imports have generally started to increase, as refinery margins improve (partly because we see lower products stocks sand higher crude oil stocks). Demand traditionally starts to recover before refinery utilization catches up to it, and that helps to draw down products stocks which, in turn, helps margins, which encourages refiners to rebuild crude stocks for processing in May and then in the summer. We will be looking at this report for signs that these aspects are being reflected.
Last Week’s Inventory Comparison: Distillate stocks are now 6.0 million bbls, or 4.12%, higher than a year ago. Heating oil inventories are 5.8 mln bbls, or 15.89%, higher than they were a year ago. Gasoline stocks are 16.0 mln bbls (up 7.41%) higher against a year ago. Crude oil stocks are now 13.1 million bbls, or 3.69%, lower than a year ago. Residual stocks are 1.2 mln bbls (3.09%) higher than a year ago, jet fuel stocks are 0.7 mln bbls, (1.64%) higher than a year ago. Utilization is 1.20% lower than a year ago and 4.76% below the eight-year average. It is 6.43% lower than the four-year, pre-Katrina average and 3.10% below the average of the four years since the big hurricanes (Katrina & Rita) in 2005.
Last Week’s Demand: Four-week, total refined products demand came in at 19.314 million bpd, up 0.219 mln bbls on the week, and up 0.563 mln bpd and 3.00% against a year ago. Three weeks ago, it was 0.159 mln bpd and 0.83% lower than a year ago. Four-week gasoline demand is at 8.808 mln bpd, up 0.06%, compared to down 1.26% two weeks ago. It was up 67,000 bpd on the week. Four-week distillate demand is now at 3.744 mln bpd, down 4.78%, compared to down 9.08% four weeks ago. Four-week jet demand is now at 1.292 mln bpd, down 3.80% against a year ago, compared to up 8.17% eight weeks ago. Four-week residual fuel demand is at 0.678 mln bpd, up 28.65%, compared to down 34.14% four weeks ago. Propane use is up 9.06%, to 1.420 mln bpd. On a weekly basis, gasoline demand dropped 182,000 bpd and lost 32,000 bpd in output and 71,000 bpd in imports. Distillate demand was up 167,000 bpd while supplies were up 131,000 bpd.
This Week’s API Report: This week’s API report showed a build of 6.500 mln bbls in crude oil stocks, a draw of 2.796 mln bbls in distillate stocks and a draw of 3.181 mln bbls in gasoline inventories. Utilization was down 0.7% to 80.9%. Implied demand came in at a very healthy 9.891 mln bpd in gasoline and at a decent 4.266 mln bpd in distillate. Crude oil imports were down 0.659 mln bpd to 9.142 mln bpd. This report was bearish for crude and bullish for refined products.
DOE Weekly Inventory Statistics
| Category | Final DOE Estimate
This Week’s Estimate | History
Last Year’s Report | Most Recent Changes
Last Week’s DOE Report | Versus A Year Ago
Millions of Barrels |
| Distillate | dn 1.25 to 1.75 mln bbls | up 1.662 | dn 0.843 mln bbls | up 6.000 |
| Gasoline | dn 0.75 to 1.25 | up 0.168 | up 0.773 | up 16.000 |
| Crude oil | up 2.00 to 3.00 | dn 0.757 | up 4.034 | dn 13.100 |
| Utilization | up 0.0% to 0.5% | up 1.7% at 83.1% | up 0.70% at 81.90% | |
| Crude Imports | up 0.000 to 0.250 mmbd | up 0.259 to 9.028 | up 0.152 to 9.236 mln bpd | |
| DOE Distillate Demand | 3.829 mln bpd | up 167,000 | Gasoline Demand | 8.882 mln bpd | dn 132,000 |
| DOE Distillate Production | 3.812 mln bpd | up 1221000 | Gasoline Production | 8.831 mln bpd | dn 032,000 |
| DOE Distillate Imports | 0.354 mln bpd | dn 090,000 | Gasoline Imports | 0.775 mln bpd | up 137,000 |
Source: US Department of Energy’s Energy Information Administration
Open Interest Analysis
Crude oil open interest fell by 10,450 contracts on Monday, when prices advanced. That looks like short-covering, which would be a bearish development. Prior to this, open interest had been up 58,286 contracts since the start of March.
Heating oil open interest grew by 2,769 contracts on Monday, when prices were higher. That looks like new buying and is supportive. There have been 20,873 contracts added since March 1st, as prices have advanced 9.01 cents a gallon.
RBOB open interest fell by 672 contracts on Monday, when prices were higher, which looks like short-covering. Open interest is up 28,883 contracts added since March 1st, during which prices have gained 15.18 cents a gallon.
Natural gas open interest grew by 4,509 on Monday, when prices were lower. That looks like new selling, which would be bearish. Open interest is up 26,708 contracts since March 1st. It represents new fund selling, predominantly.
Monday’s Open Interest Changes:
Crude 1,321,843 dn 10,450 Heat 317,520 up 2,769 RBOB 290,650 dn 672 Nat gas 842,839 up 4,509
CFTC Commitments of Traders for Nymex (Forensic analysis for the period ended Tuesday, March 2nd)
Crude oil prices rallied $0.82/bbl over the latest reporting period, and the best buying came from Managed Money accounts. They bought 8,937 new longs and covered 2,617 shorts. Producers added 14,048 new shorts, which is normal, but they also added 15,738 new longs, which suggest refiner buying in anticipation of better margins. Swap Dealers liquidated 5,908 existing longs, with Other Reportables liquidating 1,001 longs, and Swap Dealers added 5,674 new shorts while Other Reportables added 4,488 new shorts. Funds were the motivating force behind higher prices, but refinery buying helped.
In heating oil futures, prices rallied 1.35 cents a gallon, and the best net buying came from Producer short-covering. Producers added 463 new longs and covered 2,169 existing shorts, presumably at least in part in front of the March contract expiration, which occurred during the period. All three other categories liquidated longs and added fresh shorts into the rise, with Other Reportables liquidating 843 longs and selling 2,295 new shorts. Commercial short-covering led the rally.
Gasoline prices gained 2.83 cents a gallon during the period under review. Swap Dealers and Producers were buying, although Producers sold more than double what they bought. Producers added 2,860 longs and 5,270 shorts. Swap Dealers added 3,971 longs and covered 159 shorts. Funds added 422 longs and 3,715 shorts. Others liquidated 1,034 longs and covered 151 shorts. Swap Dealers were far and away the most aggressive category buying. Producers did buy, though.
In natural gas, prices dropped 10.1 cents during the period under review. Everyone (other than funds) was buying new longs and covering shorts, except Producers, who added 1,259 new shorts, in addition to 3,452 longs. Swap Dealers added 6,433 new longs and covered 167 shorts. Other Reportables added 6,911 new longs and covered 5,141 shorts. Managed Money accounts added 3,542 new longs, but those were dwarfed by the addition of 19.970 new shorts, which was the motive force lower. Funds were pressing quotes lower with a will, while everyone else was buying and covering short holdings.
Natural Gas & Utility Generation
Natural gas prices dropped 1.1 cents per million Btu yesterday as balmy temperatures in the Northeast continued to play on the market’s bearish psychology. Here, as was the case in other markets, trading volume was light, and it was “choppy” yesterday, according to Dow Jones. Temperatures have been unusually warm in the Northeast, and across a diagonal patch of the country running from Lubbock, Texas to Buffalo, New York.
Yesterday’s temperature was a potential game-changer in lower New England, where it was the second day in a row warm enough to turn the heat off. This sort of early spring comes every year, and we will doubtless do what we do every year, which is to turn the heat back on again. Of course, if we do not need to, then it would be a real game-changer. If it stays like this through the end of March, it would turn off the thermostats a solid month earlier than it did last year, when it was cold enough to keep the boilers on through the end of April, and even for a few days in May. Above and beyond that, and it is way too early to proclaim an end to heating season, three continuous weeks of above-normal readings would change the colder-than-normal temperature trend that has been in place since early November, 2008. That would make the trading funds selling natural gas contracts look prescient instead of grasping. Well, it might make them look both.
Some private forecasters have warmer temperatures lasting out to March 23rd, now, according to Dow Jones. The calendar tells us the days get longer and warmer, but if they are warmer than normal, that could undo some of the benefits of the bitterly cold readings that we had through February. It has already been a cold winter. Now, though, the most pressing question is whether it will be a longer or shorter winter. And, at this moment, it is definitely looking like it could be a shorter one with room to spare. Bargain-hunting helped prices from falling further yesterday, and we still see them as being undervalued, but three weeks of this weather could suggest they are more in line.
In cash trading yesterday, Henry Hub prices were at $4.47-$4.59, up $0.03-$0.08 on the day (DJN). SoCal prices were at $4.68-$4.81, up $0.08-$0.10 on the day. El Paso Permian prices were up $0.02-$0.05 at $4.44-$4.53. Katy prices were up $0.03-$0.04 to $4.47-$4.53. Waha prices were up $0.05-$0.05 at $4.45-$4.52. Transco 6 was up $0.05-$0.06 to $4.82-$4.96/mmBtu, according to Dow Jones News (DJN).
Palo Verde prices were last quoted at $42.00-$45.50/mwh. Northeastern prices last traded at $31.50-$44.00. Cinergy was last at $31.50-$32.25. Ercot was last at $37.50-$38.00/mwh.
Support is at $4.45-$4.47, $4.39-$4.42, $4.15-$4.17, $4.05-$4.08, $3.73-$3.75, $3.66-$3.68, $3.50-$3.53, $3.44-$3.46, $3.28-$3.32, $2.91-$2.93, $2.80-$2.82, $2.74-$2.75, and $2.69-$2.70. Resistance is at $4.61-$4.63, $4.76-$4.79, $4.86-$4.89, $4.97-$5.00, $5.16-$5.17, $5.46-$5.47, $5.55-$5.60, $5.87-$5.90, $5.99-$6.03, $6.09-$6.11, $6.15-$6.17, $6.34-$6.37, $6.65-$6.69, $6.90-$6.94, $7.01-$7.04, $7.28-$7.31, and $7.34-$7.36. The EIA predicted yesterday that total US gas demand would rise 0.7% in 2010 to 62.9 bcf/day, because of cold weather. It expects a decline of 0.4% in 2011.
Apr Natural Gas: Support : $4.45-$4.47, $4.39-$4.42, $4.15-$4.17, $4.05-$4.08, $3.73-$3.75, $3.66-$3.68.
Resistance: $4.61-$4.63, $4.76-$4.79, $4.86-$4.89, $4.97-$5.00, $5.16-$5.17, $5.46-$5.47.
Natural gas prices are struggling to find support as daily ranges contract.
Dollars per million Btu
Natural gas oscillators suggest a limited downside from here – but also tell us that there is room to move lower.
Ratio
EIA Weekly Storage Figures
Last week’s EIA report showed a draw of 172 bcf on expectations for a draw of 169-170 bcf. Stocks are now 71 bcf lower than a year ago, against a deficit of 56 bcf a week ago, a surplus of 26 bcf two weeks ago and a surplus of 172 bcf three weeks ago. Stocks are now 3.93% lower than a year ago. They are 21 bcf and 1.22% above the five-year average.
For this week, the eight-year average (of similar Friday reports) was a draw of 95.0 bcf. The five-year average was also a draw of 95.0 bcf. Last year’s draw was 112 bcf. That becomes the breakeven point, year-on-year, with 95 the average figure.
EIA Report
| Region | 02-26-10 | 02-19-10 | Change | Last Year | 5 Yr Avg |
| Cons East | 861 | 935 | dn 74 | 805 | 870 |
| Cons West | 296 | 311 | dn 15 | 293 | 242 |
| Producing | 580 | 607 | dn 27 | 710 | 604 |
| Total US | 1737 | 1853 | dn 116 | 1808 | 1716 |
Bcf, or Billions of cubic feet. Source: Energy Information Administration, US Department of Energy
News & Views
| In trading on Nymex, April crude oil prices were up $0.32 at $81.81/barrel at 7.30 AM EST, this morning. April heating oil prices were up 1.13 cents to 2.1011/gallon. April RBOB prices were up 1.53 cents to 2.2756. April natural gas prices were down $0.016 to $4.500/mmBtu. The US dollar was higher last night, but has worked its way back to negative territory against the euro early this morning. Buying has returned as traders seem to be back in a risk- acquisition mode today. Today’s DOE report will be important and could give us direction for the next few days. DOE Expectations The table below lists the final survey results for Dow Jones, Bloomberg and Reuters. The DOE report will be released at 10:30 EST on Wednesday morning this week. Category Dow Jones Bloomberg Reuters Crude up 1.700 up 2.000 up 1.900 mln bbls Distillate dn 0.700 dn 1.000 dn 0.900 Gasoline up 0.100 unchanged up 0.200 Utilization up 0.1% unchanged up 0.2% 
Crude oil prices were lower yesterday but they did not fall far, and they remain near recent highs. The next resistance level is $83.95. If prices break that level, they may attack $87.00,$90.00 & $94.85. | 
Heating oil prices were lower yesterday, but it looks more like a pause than a turn in direction. The problem is the fact that buyers have come in earlier on dips, but that highs are not going as far. That can be a warning sign on momentum. DOE History: Distillate stocks have fallen in five of the last eight years, by an average of 2.305 mln bbls. The eight-year average is a draw of 0.777 mln bbls. Gasoline stocks fell in seven of the last eight years, for a seven-year draw of 1.928 mln bbls and an eight-year average draw of 1.475 mln bbls. Crude oil stocks have been higher in seven of the last eight years for a seven-year average build of 2.889 mln bbls and it has an eight-year average build of 2.053 mln bbls. Utilization has been higher in four of the last eight years and has an eight-year average increase of 0.525%, with an eight-year average utilization figure of 86.82%. The four-year, pre-hurricane utilization average was 88.90%. Since Katrina, refineries have run at an average utilization rate of 84.75%. Crude oil imports have been higher in four of the last six years, and the average crude oil import figure over the last six years has been up 115,000 bpd. The average crude oil import figure over the last six years has been 9.698 million bpd. Imports were 462,000 bpd below that figure in last week’s report. |
| Crude prices eased slightly yesterday, and are back up today. | |
Last night’s API report showed an unexpectedly large build in crude oil inventories and almost equally significant draws in refined products inventories. Those figures should have encouraged an increase in refinery utilization, but last night’s report showed a decline in utilization, instead.
An Illustrated Look at Energy Market Factors
A Look at the US Dollar Versus the Euro
Dollar-Euro (dollar in euro cents): Three-Month Bar-Chart 
The US dollar was back up again, yesterday, although gains were cut into yesterday afternoon. Prices were steady after the regular session ended and after-hours trading began.
http://www.advfn.com/p.php?pid=forexqkchart&curcode1=USD&curcode2=EUR
A Look at the Dow Jones Industrial Average (djia)
Dow Jones Industrial Average: Six-Month Chart
The DJIA ended with a gain of 11.86 points in another relatively quiet trading day, as traders waited for something new to give direction. It was not a major factor in oil trading yesterday.
Source: http://money.cnn.com/quote/chart/chart.html?symb=djia&sid=1643&time=6mo&Submit1=Refresh
A Look at the Temperatures
Temperatures are unusually warm east of the Mississippi, running along a line running from Lubbock to Buffalo.
It will get gradually colder in the northern states as the week progresses. The southern tier will stay warm.
Recommendations for Specific Market Segments
Heating Oil Distributors Heating oil prices were slightly lower yesterday, and the lion’s share of yesterday’s profit-taking and corrective activity took place before and during yesterday’s session. By the time we got to yesterday’s close, much or most of the correction was over. It did not leave us much opportunity to buy into weakness today. The early estimates are for a drawdown of roughly a million barrels in tomorrow’s DOE report. Last week, we fell short of that (drawing down 843,000 bbls). The eight-year average is a draw of 777,000 bbls. Two of the last three years have seen draws of 2.5 million barrels or more. Last night’s API showed a surprisingly large drawdown in distillate stocks. The question is whether that will be translated today into a draw of similar size in the DOE report. We continue to prefer using caps or calls, where possible, and we would be buying into any weakness we may get, here. Diesel Users We would hold our caps and will be buying more on any dips. NYH Ultra Low Sulfur Diesel.…215.00-213.50 plus 5.250 USG Ultra Low Sulfur Diesel.…210.50-210.75 plus 1.625 Jet/Kerosene Users & Airlines New York Harbor cash market differentials were 5.50 to 6.00 cents over January heating oil in NY Harbor and 1.50 to 2.00 over the screen in the US Gulf. Diesel & Gasoline Marketers The sensible course is to stay hedged, but one can buy on a dip and wait to hedge it – carefully. Gasoline Blenders & End-Users Prices have broken to the upside, and we want to buy on any dip. Prompt NYH Fuel Ethanol…..172.00-174.00 Prompt USG Fuel Ethanol….162.00-164.00 Quotes from 03-09-10 Heating Oil End-Users We want to use dips to get in on the long side, using caps or calls. Speculators We bought calls last week, and we would continue to buy calls on any decent dips until March 15th. Refiners The 7:5+2 crack spread was $11.40 yesterday. Crude Oil Producers Crude oil prices still have resistance at $83.95. A decisive break and settle above that level would be bullish and would point prices towards $94.85 and possibly higher. | Prompt Jet Fuel Prices New York Harbor 214.50-215.00 US Gulf 210.25-210.50 Midwest (Group Three) 211.75-214.00 Midwest (Chicago) 211.75-212.25 Los Angeles 212.00-213.00 San Francisco 212.00-213.00 Portland, Oregon 212.00-213.00 Cents per gallon Propane Prices Mont Belvieu……….…..non-TET………$1.163330 Cents per gallon  Gasoline prices eased back a little yesterday, and prices may need to return to the 219.25 area before continuing to higher ground. Nonetheless, prices have broken to the upside, giving us a swing objective to $2.8989 – almost $2.90 a gallon. If we get there, retail prices would presumably be more than $3.50 a gallon with high prices licking up against $4.00 a gallon.
Obviously, a lot can happen to prevent that from happening, or it could take months to get there. But, if we get the wrong confluence of events, prices could gain 60 cents a gallon in a short period of time. A nearer-term objective is to 242.28. |
February Monthly Average Prices to follow →
Average Monthly Nymex Settlement Prices
Crude Oil
The Nymex average crude oil settlement price in February was the second highest for the month on record. February was also higher than the average for all of 2009. This year’s average was 1.95 times as large as last year’s February average. It was 3.68 times the average seen in 2002.
Crude Oil in dollars per barrel
| Month | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |
| Jan | $19.73 | $32.70 | $34.22 | $46.85 | $65.54 | $54.35 | $92.93 | $41.92 | $78.40 | |
| Feb | $20.76 | $35.73 | $34.50 | $48.05 | $61.93 | $59.39 | $95.35 | $39.26 | $76.48 | |
| Mar | $24.55 | $33.16 | $36.72 | $54.92 | $62.97 | $60.74 | $105.42 | $48.06 | | |
| Apr | $26.26 | $28.14 | $36.62 | $53.22 | $70.16 | $64.04 | $112.43 | $49.95 | | |
| May | $26.95 | $28.07 | $40.28 | $49.87 | $70.96 | $63.53 | $125.46 | $59.21 | | |
| Jun | $25.55 | $30.52 | $38.05 | $56.42 | $70.99 | $67.53 | $134.02 | $69.70 | | |
| Jul | $26.94 | $30.70 | $40.78 | $59.07 | $74.46 | $74.15 | $133.48 | $64.29 | | |
| Aug | $28.20 | $31.60 | $44.88 | $64.99 | $73.09 | $72.36 | $116.69 | $71.14 | | |
| Sep | $29.67 | $28.31 | $45.94 | $65.47 | $63.90 | $79.63 | $103.76 | $69.47 | | |
| Oct | $28.86 | $30.35 | $53.09 | $62.27 | $59.14 | $85.66 | $76.72 | $75.82 | | |
| Nov | $26.19 | $31.06 | $48.48 | $58.34 | $59.40 | $94.63 | $57.44 | $78.15 | | |
| Dec | $29.39 | $32.14 | $43.26 | | | $91.87 | $42.04 | $74.60 | | |
| Open Interest | 580,793 | 600,240 | 662,484 | | | 1,361,258 | 1,189,046 | | | |
| Year | $26.09 | $31.04 | $41.40 | | | $72.41 | $99.65 | $61.80 | | |
Open interest is for the final trading day of the month above.
Dollars per barrel
Heating Oil
The Nymex heating oil monthly average settlement price for February was the second highest for the month on record. It was 1.56 times as large as the February average a year ago. It was 66.30 cents and 25% below the high February average seen in 2008. It was 3.65 times as large as the average seen in February, 2002. The February average was 3.57% below the January average.
Heating Oil in cents per gallon
| Month | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |
| Jan | 53.75 | 90.64 | 98.56 | 132.39 | 178.71 | 154.68 | 256.13 | 146.55 | 206.09 | |
| Feb | 54.48 | 107.42 | 91.28 | 133.92 | 168.66 | 169.58 | 265.04 | 127.52 | 198.74 | |
| Mar | 63.92 | 91.62 | 91.18 | 154.34 | 177.92 | 174.15 | 300.98 | 129.28 | | |
| Apr | 66.94 | 74.70 | 92.19 | 151.54 | 197.87 | 186.20 | 318.74 | 137.58 | | |
| May | 66.83 | 72.69 | 101.54 | 141.09 | 198.60 | 188.03 | 361.65 | 150.29 | | |
| Jun | 65.01 | 76.17 | 99.96 | 162.01 | 196.92 | 199.05 | 381.20 | 178.80 | | |
| Jul | 68.44 | 78.83 | 110.05 | 166.60 | 199.51 | 207.90 | 378.16 | 166.27 | | |
| Aug | 71.44 | 82.37 | 118.24 | 183.27 | 203.46 | 199.75 | 319.08 | 188.50 | | |
| Sep | 78.53 | 74.53 | 126.34 | 200.02 | 175.42 | 219.88 | 293.18 | 175.94 | | |
| Oct | 77.70 | 82.53 | 149.03 | 193.27 | 169.00 | 229.86 | 224.13 | 195.52 | | |
| Nov | 71.96 | 84.33 | 139.91 | 172.85 | 169.89 | 260.05 | 185.11 | 202.05 | | |
| Dec | 82.51 | 90.11 | 129.88 | 174.63 | 172.64 | 257.88 | 142.12 | 199.77 | | |
| Year | 68.46 | 83.83 | 112.35 | 163.83 | 184.05 | 204.11 | 283.34 | 166.51 | | |
Cents per gallon
Gasoline
The February average Nymex gasoline (RBOB) settlement price was the second highest for the month on record. It was 17.83% lower than it had been in 2008, but it was 68.76% more than it was in 2009. Americans spent $9.125 billion more on gasoline in February, 2010 than in February, 2009, after spending $11.094 billion more on gasoline in January, 2010 than they did in January, 2009. That makes the running total $20.218 billion more so far in 2010. With gasoline accounting for roughly half the barrel, Americans have paid roughly $35-$40 billion more on oil so far this year.
For all of 2009, Americans spent $116.596 billion less on gasoline than they had a year earlier. That represents a fairly large tax rebate to consumers. Of course, had prices stayed where they had been in January, 2009, the savings would have been nearly $195 billion over the course of the year. In 2009, Americans got the equivalent of a tax rebate against 2008. So far, though, 2010 has seen a $20 billion “tax increase” in the first two months against 2009.
Gasoline in cents per gallon
| Month | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |
| Jan | 57.52 | 90.58 | 99.61 | 125.87 | 175.69 | 144.47 | 236.20 | 115.05 | 204.52 | |
| Feb | 58.91 | 101.89 | 102.46 | 126.86 | 152.89 | 164.79 | 243.35 | 118.48 | 199.95 | |
| Mar | 78.71 | 101.37 | 112.28 | 154.17 | 179.24 | 195.59 | 265.88 | 138.86 | | |
| Apr | 81.28 | 86.48 | 115.69 | 158.28 | 208.60 | 216.49 | 288.23 | 144.29 | | |
| May | 78.49 | 84.12 | 137.85 | 145.18 | 208.57 | 230.13 | 322.36 | 173.61 | | |
| Jun | 76.66 | 86.67 | 119.14 | 158.32 | 212.23 | 222.63 | 342.52 | 195.48 | | |
| Jul | 81.32 | 90.60 | 127.88 | 171.54 | 226.29 | 219.24 | 328.37 | 179.79 | | |
| Aug | 78.73 | 100.25 | 124.71 | 194.60 | 201.36 | 198.32 | 294.04 | 201.81 | | |
| Sep | 79.88 | 84.60 | 126.07 | 206.54 | 156.01 | 204.01 | 262.63 | 175.87 | | |
| Oct | 82.77 | 84.48 | 138.01 | 174.59 | 149.20 | 212.71 | 178.76 | 190.35 | | |
| Nov | 71.81 | 84.84 | 127.45 | 150.33 | 157.80 | 238.57 | 123.80 | 197.59 | | |
| Dec | 83.38 | 88.80 | 112.19 | 159.03 | 163.87 | 234.53 | 96.67 | 193.32 | | |
| Year | 75.79 | 90.39 | 120.28 | 160.44 | 182.65 | 207.27 | 248.57 | 168.71 | | |
| | | | | | | | | | | |
Cents per gallon
Natural Gas
The average Nymex natural gas price for February was $1.051/million Btu higher than the average price for all of 2009. It was one of the lower February averages seen this decade, with only 2002 and 2009 averaging less. February, 2008 was 1.66 times as expensive as this past February (2010). But, this February average was 2.3 times the price seen in February, 2002.
Natural Gas in dollars per million Btu (British thermal units)
| Month | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |
| Jan | $2.191 | $5.381 | $6.273 | $6.186 | $9.136 | $6.800 | $7.991 | $5.071 | $5.599 | |
| Feb | $2.270 | $6.658 | $5.363 | $5.050 | $7.521 | $7.547 | $8.642 | $4.372 | $5.214 | |
| Mar | $3.014 | $5.786 | $5.543 | $7.048 | $6.979 | $7.222 | $9.624 | $4.002 | | |
| Apr | $3.410 | $5.359 | $5.747 | $7.151 | $7.264 | $7.629 | $10.288 | $3.561 | | |
| May | $3.564 | $5.927 | $6.357 | $6.486 | $6.373 | $7.832 | $11.381 | $3.939 | | |
| Jun | $3.259 | $5.926 | $6.331 | $7.207 | $6.398 | $7.504 | $12.785 | $3.937 | | |
| Jul | $2.942 | $5.034 | $6.057 | $7.579 | $6.222 | $6.399 | $11.068 | $3.551 | | |
| Aug | $3.092 | $4.981 | $5.472 | $9.428 | $6.988 | $6.137 | $8.301 | $3.306 | | |
| Sep | $3.570 | $4.667 | $5.220 | $12.111 | $5.219 | $6.189 | $7.486 | $3.460 | | |
| Oct | $4.099 | $4.976 | $7.371 | $13.479 | $6.630 | $7.224 | $6.729 | $4.780 | | |
| Nov | $4.040 | $4.778 | $7.609 | $11.696 | $8.000 | $7.778 | $6.699 | $4.629 | | |
| Dec | $4.838 | $6.463 | $6.828 | $13.425 | $7.160 | $7.179 | $5.788 | $5.345 | | |
| Year | $3.357 | $5.495 | $6.181 | $8.904 | $6.991 | $7.118 | $8.899 | $4.163 | | |
Copyright Cameron Hanover, 2010
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